NOTES ON CONVERTING A BUSINESS HOUSEHOLD INTO AN ENTERPRISE

by Apra Law

Today, along with the development of the market economy, the establishment and transformation of economic organizations are taking place continuously to meet the development needs of society. Currently, when the operation of the Household Business develops, achieves good results and wants to expand on a larger scale, the owners tend to transform the household business model in the direction of an enterprise to develop appropriately, more stable with scale as well as direction, in the future. The conversion from a household business to an enterprise should pay attention to a number of important issues as follows:

First, the order and procedures for converting a Business Household into an Enterprise are as follows:

– Profile includes:

+ An application for business registration;

+ Charter of the company;

+ Authenticated copy of ID card/CCCD/Passport of the legal representative, company owner and related persons;

+ List of founding members/shareholders (For Partnerships, Limited Liability Company, Joint Stock Company);

+ The original certificate of business household registration;

+ A copy of the tax registration certificate;

+ Certificate of investment registration (in case an enterprise is established or participated in the establishment by a foreign investor or a foreign-invested economic organization in accordance with the provisions of the Investment Law and other legal documents); implementation manual).

– About how to apply for registration of business establishment:

Option 1: Submit 01 (One) set of documents directly at the Business Registration Office where the enterprise’s head office is located;

Option 2: Submit 01 (One) online application at https://dangkykinhdoanh.gov.vn/

– About processing time:

Within 03 (Three) working days, from the date of valid application, the Business Registration Office will issue the Certificate of Business Registration;

Within 02 (Two) working days from the date of issuance of the Business Registration Certificate, the Business Registration Office shall send a copy of the Business Registration Certificate and the original of the Business Household Registration Certificate to the Business Registration Office. The business registration office of the district where the Business Household is headquartered to terminate the Business Household operation.

– About processing time:

Within 03 (Three) working days, from the date of valid application, the Business Registration Office will issue the Certificate of Business Registration;

Within 02 (Two) working days from the date of issuance of the Business Registration Certificate, the Business Registration Office shall send a copy of the Business Registration Certificate and the original of the Business Household Registration Certificate to the Business Registration Office. The business registration office of the district where the Business Household is headquartered to terminate the Business Household operation.

Second, when transforming into an Enterprise, the Business Households that have operated continuously for at least one year up to the date of first issuance of the Business Registration Certificate are entitled to some of the following incentives:

– Incentives on taxes, fees and charges:

Pursuant to the Law on Supporting Small and Medium Enterprises 2017 stipulates many support policies for small and medium enterprises converting from business households:

+ Free enterprise registration fee and fee for providing business information for the first time;

+ Free appraisal, fees and charges for first-time business licenses for conditional business lines;

+ Exemption of license fees for a period of 03 (Three) years from the date of being granted the first business registration certificate.

+ Exemption or reduction of land use levy for a definite time in accordance with the law on land (if any).

– Get a bank loan:

According to the provisions of Clause 3, Article 2 of Circular 39/2016/TT-NHNN, borrowers at banks are legal entities and individuals. Meanwhile, Business Households do not have legal status, so this is a limitation for Business Households when they want to borrow capital from banks to serve production and business activities. When converting from a Business Household into a successful enterprise, the Enterprise (except for a private enterprise) has legal status and has the right to make loan transactions at the bank.

– Enjoy the State’s support policies for small and medium-sized enterprises: Support for credit access, tax and accounting support, support for production premises, support for market expansion, support for information, advice…

Third, be granted a new enterprise code according to the Certificate of Business Registration

The enterprise converting from a Business Household shall be granted a new enterprise code according to the Certificate of Business registration. business registration, tax identification number of business household ceases to be valid (including all 10-digit tax identification numbers of business households and 13-digit tax identification numbers of business locations of business households nationwide); When the business household’s tax identification number is terminated, it may still be used as the personal tax identification number of the representative of the business household.

Fourth, on fulfilling tax obligations of Business Households

Business households must be responsible for fulfilling their tax obligations with the tax authorities directly managing them. In case a business household fails to fulfill its tax obligations, the small and medium-sized enterprise converted from a business household shall inherit all of the business household’s legitimate rights, obligations and interests in accordance with law. In case a Limited Liability Company or a Joint Stock Company is established on the basis of conversion from a Business Household, the owner of the business household (the representative of the business household) must be responsible with all his/her assets for the business household. with unpaid debts of the Business Household, unless otherwise agreed upon in accordance with law.

Fifth, when converting a Business Household into an enterprise, the naming of the business is also very important. The founder of an enterprise or an enterprise must not register an enterprise name that is identical or confusing to the name of another enterprise that has already been registered. registered in the National Enterprise Registration Database nationwide, except for enterprises that have been dissolved or have had an effective court decision declaring the enterprise bankrupt.

Above is the article about “Notes on converting a business household into an enterprise” of Apra Law Firm. If you still have questions about the above issues and need to be answered, please contact the hotline for advice and support.

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APRA LAW FIRM

Address: 7th floor, 57 Tran Quoc Toan, Tran Hung Dao ward, Hoan Kiem district, Hanoi city, Vietnam.

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